Liabilities pertaining to employee benefits are often funded by companies by maintaining dedicated funds to pay those benefits. These assets are regularly funded by companies in line with any regulation that might require a minimum level of funding, or as per their internal policies.

The biggest challenge while maintaining fund assets for any liability is balancing a high level of security for these monies so that their value does not get eroded, while also trying to maximize the investment return that can be earned in order to reduce the future costs for the company. The level of balance that is ultimately achieved will depend on the risk appetite of the company and the level of security it wishes to offer to the employees by pre funding the liability.

By getting a sense of the client’s preference in terms of funding, we advise on the potential options available where clients can contribute and build funds. For clients who are looking to start funding their liabilities, we can explain the various options in terms of traditional funding plans and unit – linked plans. We also advise on the risks involved with both of these types of products and their upsides as well. Lastly, we also offer advice on the current market conditions and our view of the future, using which clients can take a more informed decision when it comes to their funding arrangements.

We can further add value by advising clients on taxation aspects of pre funding various employee benefits in India.